What W-2 Earners Can Do to Write Off Real Estate Losses Like the Pros

The W-2 Income Offset Strategy leverages real estate losses to reduce taxable W-2 income, offering significant tax savings for investors. Typically, rental losses are passive and can only offset passive income. However, by utilizing specific IRS provisions like Real Estate Professional Status (REPS), the Short-Term Rental (STR) loophole, or advanced Limited Partnership (LP) grouping—investors can reclassify these losses as non-passive. This guide details how to implement this strategy in 2025, ensuring compliance and audit readiness.